THE INSOUCIANT IMMORALITY OF GOVERNMENT
A bunch of Australians corners the Virginia state lottery.
So the public and the bureaucrats call for siccing the law on
'em, and all that. This wild reaction is good reason to put the
whole government lottery business in a long-run perspective.
Marty and Sam were bookies in the Weequaic area of Newark in
the 1930's and early 1940's. They also were the uncles of my
long-ago girlfriend Rocky (aka Rachel aka Ruckel). The "boys"
lived with their mother -- Rocky's grandmother -- who also
brought Rocky up after her mother died.
As was natural for bookies, Sam and Marty taught Rocky to
read on the Daily Telegraph racing results. They also taught her
what to say when the neighbors asked what Marty and Sam did for a
living -- as was natural for the neighbors to ask, because the
boys wore nice clothes during the depression, and did not leave
the house until eleven or twelve in the morning. Rocky learned
to say that they were necktie salesmen.
The names in the paragraph above are changed, because half a
century later it would still be scandalous were the real Marty
and Sam to have this written about them in the papers, and Rocky
would still be embarrassed. Being a bookie was illegal then.
And even if the bookies were simply independent small businessmen
providing a service the community wanted, they sometimes had to
do business with some scummy, dangerous people in the trade.
This entire setup was not a good thing for the society.
When she went to graduate school, Rocky swapped stories
about her childhood with Carmen, whose father had a tiny
stationery store which earned so little that he always was on the
brink of closing down and taking a job as a laborer. The
difference between closing down and staying open was the
occasional lottery "number" that Carmen's father sold illegally
from under the counter. Carmen's family always lived in fear
that a reform movement would cause Carmen's father to be
arrested. And Carmen's father hated himself for paying off the
cop on the beat every week to keep his protection. Carmen
himself grew up hating the father he also loved dearly because
the other kids teased him about his father's "racket".
The theory of the law which made lotteries illegal was that
betting is bad for people, and sinful.
Now in 1992, betting on government-run lotteries is legal.
Nothing has changed about whether or not betting is bad, and
sinful. What has changed is that the government gets the revenue
instead of small businesspeople.
Moreover, the District of Columbia and various states do not
simply offer their product to the public. They run
advertisements for their lotteries that are beguilingly
seductive, and misleading to boot. Our governments shamelessly
pander to our dreams, suggesting to people -- many of them poor -
- that the lottery is a good way to get money.
Something is terribly wrong.
The issue is not whether betting should be legal. I happen
to think it should be, if only because many people will gamble
one way or another. If the gambling will take place, it is
better that it be done with the protection of the law rather than
in circumstances where hoodlums and lawlessness will proliferate.
But this does not imply that the activity should be conducted by
government rather than by private individuals.
The theory that underlies having government run the lottery
is that a lottery is a painless way to obtain revenues. There is
something to be said for that. But the same revenues could be
obtained by a tax on gambling. This procedure probably would be
more efficient because it would forestall the inefficient and
corrupt management that a government monopoly always breeds.
Also of public interest is the matter of the government
advertising the lottery. Government nowadays is not only willing
to profit from people's betting, but also to promote it. This is
extraordinarily sinful practice, in my view. What the government
formerly would hunt down with the police and courts when done
privately, it now not just tolerates, but actively promotes --
just because government and government officials benefit.
Moreover, the advertising typically uses the most diabolical
of devices -- appealing to the fantasies of have-nots by holding
out the hope of huge hits. If there ever was a get-rich-quick
scam, this is it. All in the "public interest", of course.
Perhaps even worse, the promotion is a dishonest come-on for
a dishonestly-run con game. The odds are horrendous, far worse
than in any other form of gambling. Writing in Consumers'
Research, Amy Bayer reports these average odds for a single play
of legal gambling: Craps, 98%. Roulette, 95%. Slot machines,
75-95%. Jai Alai, 85-87%. Horse racing, 83-87%. Lotteries,
49%. And in New York State, the lottery payout is only 39%.
Such a low payout presents an excellent opportunity to
private individuals who will sell you the same number for a lower
price. But this is illegal, of course. The state does not want
competition that would steal its business even if the consumer
gets a better deal thereby. This must mean that consumers are
not really "the public" somehow. Or maybe "the public" is only
us when the government gets to take care of us, and not when we
take care of ourselves without the ministrations of government.
It all makes one wonder: If drugs are legalized -- which I
am convinced would be better than the present situation if the
activity were conducted privately -- will government conduct the
business for its own benefit, and run ads actually promoting the
wonders of pot and crack? Will the ads promise you that pot will
not only enhance your sex life but also improve your golf score
and your Scholastic Aptitude Test results, and make you the life
of the party to boot?
It is time for us to get shut of the idea that because
government conducts an activity, and there is no private profit -
- except for the private benefits that bureaucrats obtain, and
the private graft that is funneled to political supporters -- the
activity is acceptable, even though the same activity would not
be acceptable if done by private businesspeople. This is a
lesson that people in Eastern Europe have learned well in recent
decades. Let's start by privatising lotteries.
lotteries article0 0-200 3-10-2
Julian L. Simon teaches business at the University of Mary-
land and is an adjunct scholar at the Cato Institute. His most
recent book is Population Matters: People, Resources, Environ-
ment, and Immigration.
/page 1/article0 lotterie/March 12, 1992